What's with the treasure trove of liquidation stores along the Interstate 694 corridor? Lucky residents in and near Mounds View, Columbia Heights and Fridley can sniff out wonderful bargains at DealSmart, Discount 70 and Brand Name Deals. They're locally owned, quirkier versions of Tuesday Morning and Big Lots.

These "extreme discounters" sell closeouts, overstocks, returns and discontinued items for 40 to 80 percent less than department stores, big-box retailers and warehouse clubs. The discounts are often better than at Tuesday Morning, but the depth of selection is limited.

Brand names are emphasized. Last week I saw a diverse array of Ocean Spray, Purex, Corelle, Libbey, Hanes, Tumi, Samsung and Toshiba products on the shelves.

Deal hunter Trokon Grigsby of Isanti, Minn., shops at all three stores, usually several times a week. "The deals are great," he said. His recent bargain booty included a case (35) of bottled water for $3, a 12-piece cookware set for $14 and a coffee table for $50.

"The north corridor is a special area with hardworking residents. They're always looking for a deal," said Bob Bushey, general manager at DealSmart in Mounds View. "They're not looking for cheap imports. We have to be on our toes."

Most of the customers live nearby. At DealSmart, a former Petters location, nearly 80 percent of the customers live within 3 or 4 miles of the store, he said. Still, the bargains are well worth the trek for Twin Cities residents south of Interstate 694. All of the stores are within 6 miles of each other.

Demanding customers who know good prices seem to be keeping these retailers competitive. When I compared prices at local discounters and Amazon.com, the liquidators' prices were lower on nearly every item.

High-efficiency furnace filters made by a popular manufacturer are a great value at DealSmart ($18 for three, regularly $12 each at hardware stores). Last week Brand Name Deals had a few Tumi T-Tech 22-inch wheeled suitcases for $121 each ($200 at a warehouse club, $300 at regular retailers), although, like many items at BND, several had small blemishes. Discount 70 is selling women's swimsuit separates at two for $1.

All three stores have tried to expand their food sections, but the packaged or frozen foods have been such good sellers that new customers might think the selection is meager.

DealSmart has the largest selection. I found its prices significantly lower than at SuperTarget or Cub. A 13-ounce Roma frozen pizza is $1.75 every day (eight varieties), compared with $2.50 on sale at Cub. Brownberry bread, delivered Tuesdays and Fridays at DealSmart, is $1.09, regularly $2.50 to $3.99. Ocean Spray juice (64 ounces) is $1.49, regularly up to $3.29.

Much of the food at all three retailers is brand-name. Some are within a few months of expiration, but many items are there because of a packaging change or because they've been discontinued.

Stores adapt amid recession

You might expect liquidation stores to be booming in a recession, but even they have felt the squeeze. Extreme discounters don't have the luxury of telling suppliers what they want. If the inventories of the retailers, wholesalers and manufacturers that supply them are leaner, the liquidation stores have less to fill their shelves. That means they have to pay more for their goods.

"It's more challenging to find good merchandise," said Dani Vavere, executive vice president of Discount 70. "We don't get the shelf pulls and the overstocks we used to."

Making matters even more challenging, the typical liquidation shopper is price-sensitive.

"Our suppliers are charging more, but our profit margins are smaller now," said Vavere, who's had to toe the line on prices to keep customers.

Some bargain stores in the area have closed or are closing, including Bargain Seeker in Brooklyn Park, which closes next month.

"People who used to buy three items now buy one," said Ric Tessari, owner of Bargain Seeker. But staples still sell well, he said.

The stores have done a good job of keeping quality merchandise in the stores. When shoppers see aisle after aisle filled with cheap, imported wicker, for example, that's a sign that liquidators are trying to disguise the fact that they can't get quality goods.

I haven't seen any evidence of that happening recently. Discount 70 doesn't seem to have as many higher-end brand names as a few years ago, but the electronics and furniture departments are still strong. Brand Name Deals still lives up to its name, but some of the items, often retailers' returns, are in fair to poor condition.

After recent visits to all three stores, I think DealSmart offers the best selection in a clean, well-organized store. Grigsby, however, shops all three stores often, and he prefers Discount 70 for its brand names and slightly lower prices.